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How much does a house cost to build?-GreenDayOnline

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If you’re looking for a home but haven’t found it yet, you may consider how much it would cost to build your own. Building a house may be less expensive than you believe, and numerous financing options are available to assist you. However, as building costs have risen recently due to supply chain interruptions and workforce shortages, prices — and timelines — have also increased.

How much does a brand-new house cost?

According to a National Association of Home Builders (NAHB) report, the average cost of building a single-family, 2,600-square-foot home in 2019 was $296,652.

Prices vary significantly by location of the country in which you are building. Additionally, supply chain constraints have increased the cost of everything from lumber to home appliances, affecting the overall cost of building your house.

The cost of a new building on a per-square-foot basis varies by region.

If you’re considering building a 2,000-square-foot home in the South, you should budget roughly $200,000. Take note that these values reflect the cost of building. They do not include the cost of the land you will build.

You’ll need to consider various things when determining the exact cost of building a new home. The following is a breakdown of several expenses you should factor into your construction budget.


Before you can begin construction on your home, you must obtain the necessary permissions and pay the applicable fees to your city or municipality. Additionally, you’ll need to engage architects and engineers to design your home. These expenditures vary according to location, but the average is roughly $18,000.

Establishment and framing

The structure of your new home is a significant portion of the cost and can account for a sizable portion of the total building cost. You’re looking at an approximate cost of $87,000 for the foundation and frame.


Once the frame of your house is in place, you’ll need to finish the exterior with a roof, siding, windows, and doors. The average price is approximately $42,000.

Domestic systems

The infrastructure that heats and supplies your home with water and energy. The average homeowner spends between $40,000 and $45,000 to install all of these components.


Finishing the interior of your home, from insulation and drywall to cabinets and flooring, is one of the most expensive aspects of the process. The average cost in the United States is $75,000, but this figure might vary significantly based on your purchase preferences.


Labor is one of the most significant costs associated with home development — and one of the most challenging to quantify. The final cost will vary greatly depending on the design of the new home and the quantity of work required. According to HomeAdvisor, labor typically accounts for approximately 40% of the total construction cost.


Of course, before you begin construction on your new home, you’ll need a location for it. Site costs with new home building typically include the property’s purchase price and any necessary land preparation, such as tree removal or leveling.

As is the case with many other aspects involved in constructing a new home, the land cost varies significantly by location. The NAHB reports that the average price of a finished lot approximately 22,000 square feet in size is roughly $90,000.

Is building a house less expensive than purchasing one?

Building a new home is often more expensive than purchasing an existing home, but the exact amount varies on various factors. Additionally, the cost of numerous essential home-building components skyrocketed during the pandemic. For instance, according to data from the home remodeling website Fixr, lumber prices grew by 430 percent between 2020 and 2021, reaching a record high.

“While it varies by location and size of the home, in many areas, purchasing an existing home and upgrading is likely less expensive than building,” Fisher adds. “In many markets, lumber is still 200 to 400 percent more expensive than it was prior to the pandemic. Even in the most costly metro areas, the average price of an existing property is unlikely to have increased to that level.”

The amount of money you save by acquiring an existing home rather than creating one varies according to the property type and its condition. “If you’re prepared to live in a home that lacks this year’s renovation enhancements, you can save a lot of money by purchasing a house rather than building one,” says Thomas Jepsen, creator of Passion Plans, a website that assists users in designing their dream homes.

Financing possibilities for home construction

If you’ve established that the construction cost is justified, the next step is to investigate home construction finance possibilities. Numerous options exist, and many provide reasonable interest rates and appealing bonuses.

Loan for home construction

Home construction loans are the most prevalent method of financing the cost of building a house. There are two primary categories:

Construction-to-permanent: This single loan covers both the land and construction costs, eventually acting as a mortgage.

Construction-only: Construction-only loans, alternatively referred to as standalone construction loans, finance only the construction of your new home and require you to take out two separate loans, which may result in higher fees and interest rates. This type may make more sense if you already own a home and intend to sell it to repay the debt on your newly constructed property.

Loan for personal use

You are unlikely to be able to finance the entire cost of building a house with a personal loan – the loan amount will likely be significantly smaller than the cost of the house for the majority of people. However, this strategy may be used to pay for specific projects.

For instance, if you’ve already acquired finance for the construction of your home but require more funds for landscaping, a personal loan may suffice. Keep an eye on your expenses and avoid overcommitting.

Loan against the equity in your home

If you currently own a home and wish to build another, you may wish to explore leveraging the equity in your first home to finance the entire or a portion of the second. The amount you can borrow is determined by the amount of equity in your current house. If you own it outright, you may be able to finance the bulk of the purchase price of your new home.

Line of credit

If you have a considerable amount of equity in your home, a home equity line of credit (HELOC) is another viable alternative for financing the cost of building a house. As with a home equity loan, you will borrow against the equity in your current home to obtain finance for constructing a new one. The distinction is that a HELOC functions more like a credit card than a lump-sum loan, and you can borrow from the line of credit as needed up to the approved amount.

How to save money when building a house

The most effective strategy to save money on home construction is to obtain numerous quotations for each stage of the process. Consult with several real estate agents, architects, builders, and designers and request formal estimates from each. If one quote is much less expensive than the others, ascertain why before signing on the dotted line. You do not want to choose the cheapest choice; this may result in a poorly constructed house requiring frequent emergency repairs or pricey add-ons not included in the initial quote.

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